VAT as an expense on SA

lisa76

I am just finalising my husbands first SA. I was just re-reading some notes and I saw that it is possible to claim Net VAT paid.
The figures I include in the accounts all include VAT (apart from the motor expenses as there is a proportion of private use and I'm not sure how VAT is affected by this). If my understanding is correct I am now able to enter the figure I have paid HMRC for VAT over the accounting period as an allowable expense. This reduces tax due quite considerably so I want to make sure this is correct before I hit the button!

runninglea

Is your husbands company vat registered - if so the figures in the accounts should be net i.e. vat taken off

If you have spent £117.50 on materials then expense materials account should be £100 with £17.50 being the vat element which you have put on that quarters vat return

lisa76

Thanks runninglea. So if all the figures for the year include VAT rather than go through them all taking off the VAT can I just enter the VAT paid for the year as an expense?
Just as a matter of interest when you deduct 17.5 to find the net figure the calc is multiply by 7 divide by 47 - what is the calc now it's 20%?

runninglea

Is your husband vat registered?

Now the £100 net is £120 gross

120/120 * 20 = £20 Vat
120/120 *100 = £100 Net

lisa76

Yes, he registered for VAT as he thought he would look more credible even though his turnover is nowhere near the threshold.

runninglea

Which form are you filling out - is it the SA103S?

What have you put the income in at? Is it gross or net? (Guess at painter & decorator)

What does your OH do and does he normally work for big companies who can reclaim?

lisa76

I have no idea which form I'm filling out - it's the first time we've done it, I'm doing it online.
I have put income in gross.
He's a fire protection engineer, and he works for varying degrees of business, he thought when he set up that if he did work for Bovis for example then they would prefer to use someone VAT registered. I tried to dissuade him as it means more work for me but saying that using VT it's not that bad!

runninglea

'If your annual turnover was below £68,000, you may just enter your total allowable business expenses in box 19 rather than giving a more detailed breakdown.'


That is what the inland revenue states for expenses.

As for the vat can you not just add the 4 quarters output vat from your vat returns and take this from your sales to give you your net sales.

The same for input vat.

This will mean your SA in net of vat.

lisa76

I guess I'd rather give a detailed breakdown so that I have a print out that I can nicely cross reference with the accounts. I'm the type of person who would rather give too much information! Thanks for your help!

runninglea

yes I would to - your figures need to be net though!

Have you done a balance sheet as well, has you OH got equipment etc that he has bought

lisa76

He has only bought one thing so I've claimed relief on that. I have posted a question on here regarding the van - that's confusing me!

I will work out the net figures rather than enter VAT paid as an expense then.

Thanks so much for your help.